Policy/Social Context

In the U.S. House of Representatives, Republicans on the Energy and Commerce Committee are trying to end the new program of loans to nonprofit health care cooperatives at the same time as the oversight subcommittee is investigating the $845 million in loans that have already been made to 10 co-ops in 10 states. The Committee zeroed out the unobligated funds in the $3.4 billion program (originally slated as $6 billion in the health care insurance reform law) and the subcommittee is questioning the existing loans because they might have default rates of up to 50 percent.

Defenders of the co-ops suggest that there is no basis for the 50 percent default prediction because there is no precedent for these loans upon which to base predictions. Rep. Cliff Stearns (R-Fla.) has expressed concern about the potential losses to the American taxpayer, but it would seem that Republicans’ motivations might include an element of animus to the health care reform program in general and the role to be played by the nonprofit co-ops. Aside from politics, is there any other explanation for an environment in which programs are investigated for potential failure before they’ve really gotten started? –Rick Cohen